SharpLink Stock Crashes 69% After Surprise Ethereum Treasury Move
In a stunning move that caught many investors off guard, SharpLink Gaming’s stock nosedived nearly 70% on Thursday after the company announced a surprising pivot into the world of cryptocurrency.
The sports betting technology firm saw its shares plummet from around $6.15 to just under $2 in a matter of hours, triggered by what initially appeared to be a routine regulatory filing — but quickly turned into something far more unexpected.
The Surprise That Sparked the Sell-Off
At the heart of the chaos was SharpLink’s announcement that it plans to raise $425 million through a private placement. That’s not unusual for growing companies — but what shocked the market was how it plans to use the money: to buy Ethereum.
Yes, SharpLink is setting up what it calls a “blockchain treasury,” meaning it will hold a large chunk of Ethereum on its balance sheet. For a company better known for connecting sportsbooks with users and helping drive sports betting traffic, this sudden shift into crypto raised more than a few eyebrows.
Investors wasted no time reacting. The sheer size of the capital raise — and the massive dilution it brings — sparked immediate panic. The stock cratered by 69% by the end of the day.
Why This Hit So Hard
Let’s break it down. SharpLink plans to issue nearly 70 million new shares at $6.15 each. That’s a big increase compared to its current float, which stood at just under 2 million shares. For existing investors, that means their shares just became a much smaller piece of the pie — and naturally, that’s not a popular outcome.
Then there’s the crypto angle. While Ethereum has gained popularity and respect in recent years, it’s still a highly volatile asset. Investors were left wondering why a company in the sports betting space is suddenly taking a huge financial bet on a digital coin.
“It’s like you went in to order a burger and they handed you sushi,” one retail trader commented on Reddit. “It’s not that sushi is bad — it’s just not what you were here for.”
The Shkreli Factor
Adding a strange twist to the story, Martin Shkreli — yes, that Martin Shkreli — weighed in on the news. The controversial former pharma executive suggested SharpLink’s stock could become highly volatile due to the small number of shares actually available to trade.
Although Shkreli insisted he wasn’t recommending anyone buy the stock, just the fact that he was paying attention added more drama to an already chaotic trading day. Some speculators even started discussing possible short squeezes online, further fueling the frenzy.
A Company Under Pressure
Even before this, SharpLink wasn’t exactly swimming in profits. The company has reported tens of millions in losses over the past couple of years and has been navigating the challenges of a competitive and still-evolving U.S. sports betting market.
With an accumulated deficit of over $75 million, it’s possible the Ethereum move was an effort to tap into rising crypto enthusiasm and bring some long-term value to its books. But so far, Wall Street’s verdict is clear: the market isn’t buying it — literally or figuratively.
What Comes Next?
The dust hasn’t settled yet. SharpLink hasn’t offered much more detail beyond the initial filing, and investors are now left wondering what the company’s actual strategy is. Will this be a one-time Ethereum buy, or the beginning of a bigger pivot toward blockchain?
For now, SharpLink’s leadership faces an uphill battle in restoring investor trust. The stock is in freefall, the market is skeptical, and the crypto gamble — while bold — has yet to prove its worth.
The only certainty? It’s going to be a bumpy ride.
